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Wiley Reports Third Quarter Fiscal 2021 Results

03/04/2021

HOBOKEN, N.J.--(BUSINESS WIRE)-- John Wiley & Sons, Inc. (NYSE:JWA)(NYSE:JWB), a global leader in research and education, today announced results for the third quarter ended January 31, 2021.

THIRD QUARTER SUMMARY

  • GAAP Results: Revenue of $483 million (+3%) and EPS of $0.39 (-$0.24) due to restructuring charges of $0.28 primarily related to real estate capacity reduction
  • Adjusted Results at constant currency (cc): Revenue +2%, EBITDA +7%, and EPS +6%
  • Full Year Outlook raised for Revenue, Adjusted EBITDA, Adjusted EPS and Free Cash Flow

MANAGEMENT COMMENTARY

“Wiley’s strategic focus and solid execution in open research and online education continue to yield strong results,” said Brian Napack, President and CEO. “During the quarter, we accelerated our Research growth strategy with the acquisition of Hindawi, a rapidly-growing leader in open access publishing, and we strengthened the Wiley network with new university and corporate partners for online degree and talent development services.”

THIRD QUARTER PERFORMANCE

 

GAAP Measures
Unaudited ($millions except for EPS)

Q3 2021

Q3 2020

Change

 

Revenue

$482.9

 

$467.1

3%

Diluted EPS

$0.39

 

$0.63

(38%)

Non-GAAP Measures

Q3 2021

Q3 2020

Change
Constant Currency

Revenue

$482.9

 

$467.1

2%

Adjusted EBITDA

$104.3

 

$95.5

7%

Adjusted EPS

$0.68

 

$0.68

6%

Excluding acquisitions and currency impact, revenue declined 1% for the quarter. Wiley recorded a favorable FX variance of $7.6 million in revenue and $2.1 million in Adjusted EBITDA, and an unfavorable FX variance of $0.04 per share in Adjusted EPS.

Revenue

  • Research Publishing & Platforms rose 3% as reported and 1% at constant currency, with strong growth in open access and inorganic contributions from acquisitions offsetting anticipated subscription revenue pressure.
  • Academic & Professional Learning declined 2% as reported and 4% at constant currency mainly due to COVID-19 impact on test prep and in-person corporate training, and a decline in print book revenue, which offset continued growth in digital content and courseware.
  • Education Services increased 25% as reported and 24% at constant currency, driven by organic revenue growth of 13% from strong online enrollment and new student starts, and the two-month inorganic contribution from mthree (+$8 million).

Adjusted EBITDA

  • Research Publishing & Platforms was even with the prior year at constant currency, as revenue growth, operational efficiencies, and COVID-related expense savings were offset by higher royalties and one-time charges associated with the Hindawi acquisition.
  • Academic & Professional Learning rose 2% at constant currency, reflecting business optimization gains and COVID-related expense savings.
  • Education Services rose $12 million to $13 million, driven by revenue growth and business optimization initiatives, notably sustained improvement in student acquisition costs. Adjusted EBITDA margin for the quarter was 19%, up from 2% in the prior year.
  • Adjusted Corporate Expenses rose 19% to $44 million mainly due to higher employment-related expenses.

EPS

  • GAAP EPS of $0.39 declined from $0.63 in the prior year, reflecting restructuring charges of $0.28 per share, primarily related to a previously disclosed reduction in Wiley’s real estate footprint.
  • Adjusted EPS of $0.68 compared to $0.68 in the prior year with operating income growth and lower interest expense partially offset by higher FX transaction losses mostly related to the funding of the Hindawi acquisition. In the quarter, the Hindawi acquisition was dilutive to EPS by approximately $0.12 per share.

Balance Sheet and Liquidity

  • Net debt-to-EBITDA ratio (trailing twelve months) at quarter-end was 2.2 as compared to 1.8 at the end of the year-ago period.
  • Available liquidity was approximately $620 million at quarter-end, including $91 million of cash on hand and $529 million of undrawn credit capacity.

Cash Flow (YTD)

  • Net Cash Provided by Operating Activities was $155 million compared to $89 million in the prior year period, primarily driven by higher cash earnings.
  • Free Cash Flow less Product Development Spending was $80 million compared to $5 million in the prior year, reflecting the improvement in Net Cash Provided by Operating Activities and lower capital expenditures.
  • Share repurchases resumed in January following the announcement of the Hindawi acquisition. During the brief remaining trading period, Wiley spent approximately $7 million to acquire 146,852 shares at an average cost per share of $48.09.

FISCAL YEAR 2021 OUTLOOK

Based on performance through nine months, Wiley is raising its full year outlook for Revenue, Adjusted EBITDA, Adjusted EPS, and Free Cash Flow. The updated outlook assumes that current foreign exchange rates prevail through the end of the fiscal year. The outlook also includes the projected fourth quarter impact of the Hindawi acquisition. For the full year, the Company continues to anticipate low-single digit revenue growth overall, which includes low-single digit growth in Research, a mid-single digit decline in Academic & Professional Learning, and double-digit growth in Education Services (mid-to-high single digit growth on an organic basis).

Updated projected performance ranges for consolidated Revenue, Adjusted EBITDA, Adjusted EPS, and Free Cash Flow are as follows:

Metric
($millions, except EPS)

Fiscal 2020
Actual

Fiscal 2021
Previous Outlook

Fiscal 2021
Current Outlook

Revenue

$1,831

$1,865 - $1,885

Raised, $1,900 - $1,920

Adjusted EBITDA

$356

$380 - $395

Raised, $395 - $410

Adjusted EPS

$2.40

$2.50 - $2.70

Raised, $2.60 - $2.75

Free Cash Flow

$173

$175 - $200

Raised, $200 - $225

  • Current outlook reflects actual currency impact to date, current exchange rates sustained through Q4 (Euro at $1.18 and Pound Sterling at $1.32), and the approximate four-month impact of the Hindawi acquisition (Revenue +$10M, Adjusted EBITDA neutral, and Adjusted EPS -$0.15).

EARNINGS CONFERENCE CALL

Scheduled for today, March 4 at 10:00 a.m. (ET). Access the webcast directly at https://event.on24.com/wcc/r/3036824/A98F5D273A4855BB2457F285ACDA49A7, or at Wiley.com under Investor Relations - Events and Presentations at https://www.wiley.com/en-us/investors. U.S. callers, please dial (844) 418-0103 and enter the participant code 7251548#. International callers, please dial (236) 714-3019 and enter the participant code 7251548#.

ABOUT WILEY

Wiley drives the world forward with research and education. Through publishing, platforms, and services, we help researchers, professionals, students, universities, and corporations to achieve their goals in an ever-changing world. And for more than 200 years, we have delivered consistent performance to all our stakeholders. The Company's website can be accessed at www.wiley.com.

NON-GAAP FINANCIAL MEASURES

Wiley provides non-GAAP financial measures and performance results such as “Adjusted EPS,” “Adjusted Revenue,” “Adjusted Operating Income,” “Adjusted EBITDA,” “Adjusted CTP,” “Free Cash Flow less Product Development Spending,” “organic revenue,” and results on a Constant Currency basis to assess underlying business performance and trends. Management believes non-GAAP financial measures, which exclude the impact of restructuring charges and credits and certain other items, and the impact of acquisitions provide a useful comparable basis to analyze operating results and earnings. See the reconciliations of non-GAAP financial measures and explanations of the uses of non-GAAP measures in the supplementary information.

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements. Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company and are subject to change based on many important factors. Such factors include, but are not limited to: (i) the level of investment in new technologies and products; (ii) subscriber renewal rates for the Company's journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key online retailers; (vi) the seasonal nature of the Company's educational business and the impact of the used book market; (vii) worldwide economic and political conditions; (viii) the Company's ability to protect its copyrights and other intellectual property worldwide (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities; (x) the Company’s ability to realize operating savings over time and in fiscal year 2021 in connection with our multi-year Business Optimization Program; (xi) the impact of COVID-19 on our operations, performance, and financial condition; and (xii) other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements to reflect subsequent events or circumstances.

Category: Earnings Releases

 

JOHN WILEY & SONS, INC.

SUPPLEMENTARY INFORMATION (1)(2)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(unaudited)

 

Three Months Ended

 

Nine Months Ended

January 31,

 

January 31,

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenue, net

$

482,912

 

$

467,131

 

$

1,405,249

 

$

1,356,866

 

Costs and expenses:
Cost of sales

 

157,636

 

 

153,924

 

 

457,298

 

 

440,433

 

Operating and administrative expenses

 

251,242

 

 

245,683

 

 

735,778

 

 

736,233

 

Restructuring and related charges

 

20,675

 

 

3,298

 

 

24,813

 

 

18,034

 

Amortization of intangibles

 

19,032

 

 

15,732

 

 

53,089

 

 

45,722

 

Total Costs and Expenses

 

448,585

 

 

418,637

 

 

1,270,978

 

 

1,240,422

 

 
Operating Income

 

34,327

 

 

48,494

 

 

134,271

 

 

116,444

 

As a % of revenue

 

7.1

%

 

10.4

%

 

9.6

%

 

8.6

%

 
Interest expense

 

(4,853

)

 

(6,309

)

 

(13,928

)

 

(19,173

)

Foreign exchange transaction losses

 

(5,694

)

 

(1,745

)

 

(6,473

)

 

(1,761

)

Other income

 

3,612

 

 

4,232

 

 

11,769

 

 

9,602

 

Income Before Taxes

 

27,392

 

 

44,672

 

 

125,639

 

 

105,112

 

 
Provision for income taxes

 

5,231

 

 

9,229

 

 

18,712

 

 

21,355

 

Effective tax rate

 

19.1

%

 

20.7

%

 

14.9

%

 

20.3

%

Net Income

$

22,161

 

$

35,443

 

$

106,927

 

$

83,757

 

As a % of revenue

 

4.6

%

 

7.6

%

 

7.6

%

 

6.2

%

 
Weighted Average Number of Common Shares Outstanding
Basic

 

55,984

 

 

56,073

 

 

55,967

 

 

56,312

 

Diluted

 

56,332

 

 

56,503

 

 

56,230

 

 

56,698

 

 
Earnings Per Share
Basic

$

0.40

 

$

0.63

 

$

1.91

 

$

1.49

 

Diluted

$

0.39

 

$

0.63

 

$

1.90

 

$

1.48

 

Notes:
(1) The supplementary information included in this press release for the three and nine months ended January 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.

In the three months ended January 31, 2021, we completed the acquisition of Hindawi, which is included in our Research Publishing and Platforms segment results.
(2) All amounts are approximate due to rounding.

JOHN WILEY & SONS, INC.

SUPPLEMENTARY INFORMATION (1)

RECONCILIATION OF GAAP EPS to NON-GAAP ADJUSTED EPS - DILUTED

(unaudited)

 

Three Months Ended

 

Nine Months Ended

January 31,

 

January 31,

2021

 

2020

 

2021

 

2020

GAAP Earnings Per Share - Diluted

$

0.39

$

0.63

 

$

1.90

 

$

1.48

 

Adjustments:
Restructuring and related charges (A)

 

0.28

 

0.04

 

 

0.33

 

 

0.24

 

Foreign exchange losses (gains) on intercompany transactions (A)

 

0.01

 

0.01

 

 

(0.01

)

 

0.02

 

Impact of increase in U.K. statutory rate on deferred tax balances (B)

 

-

 

-

 

 

0.12

 

 

-

 

Impact of U.S. CARES Act (C)

 

-

 

-

 

 

(0.25

)

 

-

 

Non-GAAP Adjusted Earnings Per Share - Diluted

$

0.68

$

0.68

 

$

2.09

 

$

1.74

 

 
Notes:
(A) The table below shows the net of tax impact of our adjustments to GAAP Earnings Per Share noted above.

Three Months Ended

 

Nine Months Ended

January 31,

 

January 31,

(amounts in millions)

2021

 

2020

 

2021

 

2020

Net of tax, charges related to the Business Optimization Program

$

15.7

$

2.9

 

$

18.6

 

$

13.9

 

Net of tax, (credits) charges related to the Restructuring and Reinvestment Program

$

0.0

$

(0.4

)

$

(0.2

)

$

(0.2

)

Net of tax, foreign exchange transaction losses (gains)

$

0.2

$

0.6

 

$

(0.7

)

$

1.3

 

 
(B) During the first quarter of fiscal 2021, the U.K. officially enacted legislation that increased its statutory rate from 17% to 19%. This resulted in a $6.7 million non-cash deferred tax expense from the re-measurement of the Company’s applicable U.K. net deferred tax liabilities.
(C) In connection with the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and certain regulations issued in late July 2020, the Company elected to carry back its fiscal year 2020 loss for tax purposes ("NOL") to its fiscal year 2015 and claimed a $20.7 million refund. The NOL carryback to a year when our corporate tax rate was 35%, including certain related benefits, resulted in a $14 million tax benefit. We received the refund in February 2021.
(1) See Explanation of Usage of Non-GAAP performance measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three and nine months ended January 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
RECONCILIATION OF GAAP NET INCOME to NON-GAAP EBITDA AND ADJUSTED EBITDA
(unaudited)
 

Three Months Ended

 

Nine Months Ended

January 31,

 

January 31,

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Net Income

$

22,161

 

$

35,443

 

$

106,927

 

$

83,757

 

Interest expense

 

4,853

 

 

6,309

 

 

13,928

 

 

19,173

 

Provision for income taxes

 

5,231

 

 

9,229

 

 

18,712

 

 

21,355

 

Depreciation and amortization

 

49,316

 

 

43,681

 

 

147,253

 

 

128,538

 

Non-GAAP EBITDA

 

81,561

 

 

94,662

 

 

286,820

 

 

252,823

 

Restructuring and related charges

 

20,675

 

 

3,298

 

 

24,813

 

 

18,034

 

Foreign exchange transaction losses

 

5,694

 

 

1,745

 

 

6,473

 

 

1,761

 

Other income

 

(3,612

)

 

(4,232

)

 

(11,769

)

 

(9,602

)

Non-GAAP Adjusted EBITDA

$

104,318

 

$

95,473

 

$

306,337

 

$

263,016

 

Adjusted EBITDA Margin

 

21.6

%

 

20.4

%

 

21.8

%

 

19.4

%

Notes:
(1) See Explanation of Usage of Non-GAAP performance measures included in this supplementary information for additional details on the reasons why management believes presentation of each non-GAAP performance measure provides useful information to investors. The supplementary information included in this press release for the three and nine months ended January 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.

JOHN WILEY & SONS, INC.

SUPPLEMENTARY INFORMATION (1)

SEGMENT RESULTS

(in thousands)

(unaudited)

 
% Change

Three Months Ended January 31,

 

Favorable (Unfavorable)

 

2021

 

 

 

2020

 

 

Reported

Constant
Currency

Research Publishing & Platforms:
Revenue, net
Research Publishing

$

229,327

 

$

223,393

 

3%

1%

Research Platforms

 

10,523

 

 

10,163

 

4%

4%

Total Revenue, net

$

239,850

 

$

233,556

 

3%

1%

 
Contribution to Profit

$

60,782

 

$

63,861

 

-5%

-6%

Adjustments:
Restructuring charges

 

83

 

 

40

 

Non-GAAP Adjusted Contribution to Profit

$

60,865

 

$

63,901

 

-5%

-6%

Depreciation and amortization

 

20,997

 

 

17,056

 

Non-GAAP Adjusted EBITDA

$

81,862

 

$

80,957

 

1%

0%

Adjusted EBITDA margin

 

34.1

%

 

34.7

%

 
Academic & Professional Learning:
Revenue, net
Education Publishing

$

98,160

 

$

100,982

 

-3%

-4%

Professional Learning

 

75,955

 

 

77,296

 

-2%

-4%

Total Revenue, net

$

174,115

 

$

178,278

 

-2%

-4%

 
Contribution to Profit

$

32,606

 

$

28,793

 

13%

11%

Adjustments:
Restructuring charges

 

328

 

 

1,541

 

Non-GAAP Adjusted Contribution to Profit

$

32,934

 

$

30,334

 

9%

6%

Depreciation and amortization

 

17,233

 

 

17,806

 

Non-GAAP Adjusted EBITDA

$

50,167

 

$

48,140

 

4%

2%

Adjusted EBITDA margin

 

28.8

%

 

27.0

%

 
Education Services:
Revenue, net
Education Services OPM (2)

$

56,725

 

$

50,263

 

13%

13%

mthree (2)

 

12,222

 

 

5,034

 

#

#

Total Revenue, net

$

68,947

 

$

55,297

 

25%

24%

 
Contribution to Profit

$

5,427

 

$

(5,166

)

#

#

Adjustments:
Restructuring charges

 

71

 

 

4

 

Non-GAAP Adjusted Contribution to Profit

$

5,498

 

$

(5,162

)

#

#

Depreciation and amortization

 

7,493

 

 

5,987

 

 

 

Non-GAAP Adjusted EBITDA

$

12,991

 

$

825

 

#

#

Adjusted EBITDA margin

 

18.8

%

 

1.5

%

 
Corporate Expenses:

$

(64,488

)

$

(38,994

)

-65%

-65%

Adjustments:
Restructuring charges

 

20,193

 

 

1,713

 

Non-GAAP Adjusted Corporate Expenses

$

(44,295

)

$

(37,281

)

-19%

-19%

Depreciation and amortization

 

3,593

 

 

2,832

 

Non-GAAP Adjusted EBITDA

$

(40,702

)

$

(34,449

)

-18%

-18%

 
Consolidated Results:
Revenue, net

$

482,912

 

$

467,131

 

3%

2%

 
Operating Income

$

34,327

 

$

48,494

 

-29%

-32%

Adjustments:
Restructuring charges

 

20,675

 

 

3,298

 

Non-GAAP Adjusted Operating Income

$

55,002

 

$

51,792

 

6%

3%

Depreciation and amortization

 

49,316

 

 

43,681

 

Non-GAAP Adjusted EBITDA

$

104,318

 

$

95,473

 

9%

7%

Adjusted EBITDA margin

 

21.6

%

 

20.4

%

(1) The supplementary information included in this press release for the three and nine months ended January 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
(2) In May 2020, we moved the IT bootcamp business acquired as part of The Learning House acquisition from Education Services OPM to mthree. As a result, the prior period revenue related to the IT bootcamp business has been included in mthree. There were no changes to our total Education Services or our consolidated financial results. The inorganic revenue from mthree in the three and nine months ended January 31, 2021 was $7.7 million and $32.6 million, respectively.
 
# Variance greater than 100%
JOHN WILEY & SONS, INC.
SUPPLEMENTARY INFORMATION (1)
SEGMENT RESULTS
(in thousands)
(unaudited)
% Change

Nine Months Ended January 31,

 

Favorable (Unfavorable)

 

2021

 

 

 

2020

 

 

Reported

Constant
Currency

Research Publishing & Platforms:
Revenue, net
Research Publishing

$

700,482

 

$

668,405

 

5%

4%

Research Platforms

 

31,512

 

 

29,235

 

8%

8%

Total Revenue, net

$

731,994

 

$

697,640

 

5%

4%

 
Contribution to Profit

$

204,688

 

$

182,798

 

12%

11%

Adjustments:
Restructuring (credits) charges

 

(352

)

 

3,386

 

Non-GAAP Adjusted Contribution to Profit

$

204,336

 

$

186,184

 

10%

9%

Depreciation and amortization

 

60,463

 

 

51,246

 

Non-GAAP Adjusted EBITDA

$

264,799

 

$

237,430

 

12%

11%

Adjusted EBITDA margin

 

36.2

%

 

34.0

%

 
Academic & Professional Learning:
Revenue, net
Education Publishing

$

265,349

 

$

268,246

 

-1%

-2%

Professional Learning

 

206,269

 

 

232,615

 

-11%

-12%

Total Revenue, net

$

471,618

 

$

500,861

 

-6%

-7%

 
Contribution to Profit

$

62,104

 

$

68,754

 

-10%

-12%

Adjustments:
Restructuring charges

 

1,902

 

 

5,146

 

Non-GAAP Adjusted Contribution to Profit

$

64,006

 

$

73,900

 

-13%

-15%

Depreciation and amortization

 

53,757

 

 

51,679

 

Non-GAAP Adjusted EBITDA

$

117,763

 

$

125,579

 

-6%

-8%

Adjusted EBITDA margin

 

25.0

%

 

25.1

%

 
Education Services:
Revenue, net
Education Services OPM(2)

$

163,248

 

$

151,200

 

8%

8%

mthree (2)

 

38,389

 

 

7,165

 

#

#

Total Revenue, net

$

201,637

 

$

158,365

 

27%

27%

 
Contribution to Profit

$

13,410

 

$

(9,782

)

#

#

Adjustments:
Restructuring charges

 

294

 

 

1,618

 

Non-GAAP Adjusted Contribution to Profit

$

13,704

 

$

(8,164

)

#

#

Depreciation and amortization

 

21,982

 

 

17,007

 

Non-GAAP Adjusted EBITDA

$

35,686

 

$

8,843

 

#

#

Adjusted EBITDA margin

 

17.7

%

 

5.6

%

 
Corporate Expenses:

$

(145,931

)

$

(125,326

)

-16%

-17%

Adjustments:
Restructuring charges

 

22,969

 

 

7,884

 

Non-GAAP Adjusted Corporate Expenses

$

(122,962

)

$

(117,442

)

-5%

-5%

Depreciation and amortization

 

11,051

 

 

8,606

 

Non-GAAP Adjusted EBITDA

$

(111,911

)

$

(108,836

)

-3%

-3%

 
Consolidated Results:
Revenue, net

$

1,405,249

 

$

1,356,866

 

4%

3%

 
Operating Income

$

134,271

 

$

116,444

 

15%

12%

Adjustments:
Restructuring charges

 

24,813

 

 

18,034

 

Non-GAAP Adjusted Operating Income

$

159,084

 

$

134,478

 

18%

16%

Depreciation and amortization

 

147,253

 

 

128,538

 

Non-GAAP Adjusted EBITDA

$

306,337

 

$

263,016

 

16%

15%

Adjusted EBITDA margin

 

21.8

%

 

19.4

%

# Variance greater than 100%

JOHN WILEY & SONS, INC.

SUPPLEMENTARY INFORMATION (1)

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands)

(unaudited)

 

January 31,

 

April 30,

2021

 

2020

Assets:
Current Assets
Cash and cash equivalents

$

91,321

$

202,464

Accounts receivable, net

 

278,939

 

309,384

Inventories, net

 

40,685

 

43,614

Prepaid expenses and other current assets

 

84,765

 

59,465

Total Current Assets

 

495,710

 

614,927

 
Product Development Assets, net

 

48,528

 

53,643

Royalty Advances, net

 

43,755

 

36,710

Technology, Property and Equipment, net

 

284,638

 

298,005

Intangible Assets, net

 

1,024,887

 

807,405

Goodwill

 

1,297,059

 

1,116,790

Operating Lease Right-of-Use Assets

 

125,287

 

142,716

Other Non-Current Assets

 

106,501

 

98,598

Total Assets

$

3,426,365

$

3,168,794

 
Liabilities and Shareholders' Equity:
Current Liabilities
Accounts payable

$

72,937

$

93,691

Accrued royalties

 

143,884

 

87,408

Short-term portion of long-term debt

 

12,500

 

9,375

Contract liabilities

 

398,477

 

520,214

Accrued employment costs

 

103,223

 

108,448

Accrued income taxes

 

9,168

 

13,728

Short-term portion of operating lease liabilities

 

20,965

 

21,810

Other accrued liabilities

 

80,922

 

72,595

Total Current Liabilities

 

842,076

 

927,269

Long-Term Debt

 

948,241

 

765,650

Accrued Pension Liability

 

167,881

 

187,969

Deferred Income Tax Liabilities

 

164,583

 

119,127

Operating Lease Liabilities

 

153,031

 

159,782

Other Long-Term Liabilities

 

86,751

 

75,373

Total Liabilities

 

2,362,563

 

2,235,170

Shareholders' Equity

 

1,063,802

 

933,624

Total Liabilities and Shareholders' Equity

$

3,426,365

$

3,168,794

(1) The supplementary information included in this press release for January 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.

JOHN WILEY & SONS, INC.

SUPPLEMENTARY INFORMATION (1)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(in thousands)

(unaudited)

 

Nine Months Ended

January 31,

 

2021

 

 

 

2020

 

Operating Activities:
Net income

$

106,927

 

$

83,757

 

Amortization of intangibles

 

53,089

 

 

45,722

 

Amortization of product development assets

 

25,323

 

 

26,653

 

Depreciation and amortization of technology, property, and equipment

 

68,841

 

 

56,163

 

Other non-cash charges and credits

 

83,995

 

 

51,436

 

Net change in operating assets and liabilities

 

(183,349

)

 

(174,844

)

Net Cash Provided By Operating Activities

 

154,826

 

 

88,887

 

 
Investing Activities:
Additions to technology, property, and equipment

 

(58,176

)

 

(65,924

)

Product development spending

 

(17,103

)

 

(17,770

)

Businesses acquired in purchase transactions, net of cash acquired

 

(298,590

)

 

(200,642

)

Acquisitions of publication rights and other

 

(18,524

)

 

(1,548

)

Net Cash Used in Investing Activities

 

(392,393

)

 

(285,884

)

 
Financing Activities:
Net debt borrowings

 

174,170

 

 

319,417

 

Cash dividends

 

(57,802

)

 

(57,632

)

Purchase of treasury shares

 

(7,063

)

 

(35,000

)

Other

 

6,538

 

 

(5,903

)

Net Cash Provided By Financing Activities

 

115,843

 

 

220,882

 

 
Effects of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash

 

10,631

 

 

530

 

 
Change in Cash, Cash Equivalents and Restricted Cash for Period

 

(111,093

)

 

24,415

 

 
Cash, Cash Equivalents and Restricted Cash - Beginning

 

203,047

 

 

93,548

 

Cash, Cash Equivalents and Restricted Cash - Ending

$

91,954

 

$

117,963

 

 
CALCULATION OF NON-GAAP FREE CASH FLOW LESS PRODUCT DEVELOPMENT SPENDING
 

Nine Months Ended

January 31,

 

2021

 

 

 

2020

 

Net Cash Provided By Operating Activities

$

154,826

 

$

88,887

 

Less: Additions to technology, property, and equipment

 

(58,176

)

 

(65,924

)

Less: Product development spending

 

(17,103

)

 

(17,770

)

Free Cash Flow less Product Development Spending

$

79,547

 

$

5,193

 

See Explanation of Usage of Non-GAAP Measures included in this supplemental information.
(1) The supplementary information included in this press release for the nine months ended January 31, 2021 is preliminary and subject to change prior to the filing of our upcoming Quarterly Report on Form 10-Q with the Securities and Exchange Commission.

JOHN WILEY & SONS, INC.

Explanation of Usage of NON-GAAP Performance Measures

 
In this earnings release and supplemental information, management may present the following non-GAAP performance measures:
 
  • Adjusted Earnings Per Share ("Adjusted EPS");
  • Free Cash Flow less Product Development Spending;
  • Adjusted Revenue;
  • Adjusted Operating Income and margin;
  • Adjusted Contribution to Profit and margin;
  • EBITDA, Adjusted EBITDA and margin;
  • Organic revenue; and
  • Results on a constant currency basis.
Management uses these non-GAAP performance measures as supplemental indicators of our operating performance and financial position as well for internal reporting and forecasting purposes, when publicly providing its outlook, to evaluate the Company's performance and calculate incentive compensation. Non-GAAP performance measures do not have standardized meanings prescribed by U.S. GAAP and therefore may not be comparable to the calculation of similar measures used by other companies and should not be viewed as alternatives to measures of financial results under U.S. GAAP.
 
The Company presents these non-GAAP performance measures in addition to U.S. GAAP financial results because it believes that these non-GAAP performance measures provide useful information to investors and financial analysts for operational trends and comparisons over time. The use of these non-GAAP performance measures may also provide a consistent basis to evaluate operating profitability and performance trends by excluding items that we do not consider to be controllable activities for this purpose. For example:
 
  • Adjusted EPS, Adjusted Revenue, Adjusted Operating Income, Adjusted Contribution to Profit, Adjusted EBITDA and organic revenue provide a more comparable basis to analyze operating results and earnings and are measures commonly used by shareholders to measure our performance.
  • Free Cash Flow less Product Development Spending helps assess our ability, over the long term, to create value for our shareholders as it represents cash available to repay debt, pay common stock dividends and fund share repurchases and acquisitions.
  • Results on a constant currency basis removes distortion from the effects of foreign currency movements to provide better comparability of our business trends from period to period. We measure our performance excluding the impact of foreign currency (or at “constant currency”), which means that we apply the same foreign currency exchange rates for the current and equivalent prior period.
In addition, the Company has historically provided these or similar non-GAAP performance measures and understand that some investors and financial analysts find this information helpful in analyzing the Company's operating margins, and net income and comparing the Company's financial performance to that of its peer companies and competitors. Based on interactions with investors, we also believe that the Company's non-GAAP performance measures are regarded as useful to our investors as supplemental to our U.S. GAAP financial results, and that there is no confusion regarding the adjustments or our operating performance to our investors due to the comprehensive nature of our disclosures.

 

Investor Contact:
Brian Campbell
201.748.6874
brian.campbell@wiley.com

Media Contact:
Katie Roberts
602.373.7233
karoberts@wiley.com

Source: John Wiley and Sons

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